Postal regulators move to increase stamp prices

Seeking to bolster the ailing U.S. Postal Service, federal regulators moved on Friday to allow bigger jumps to stamp prices beyond the rate of inflation, a move that could eventually add millions more dollars to companies’ shipping rates from prescription drugs to magazine subscriptions.

The Postal Regulatory Commission announced the decision as part of a much-anticipated, 10-year review of the Postal Service’s stamp rates. It concluded that the post office’s mounting red ink from declining mail volume and costs from its pension and health care obligations hamper the ability to provide reliable mail and package service in the digital age.

The commission’s plan would give the Postal Service freedom to raise the price of its first-class stamp, now at 49 cents, by an additional 2 percent above the rate of inflation to help avoid bankruptcy and make needed multi-billion dollar investments, such as upgraded information technology and new delivery trucks.

Businesses immediately voiced objections, calling the regulatory plan “disappointing.”

“The more-than-doubling over 5 years at current inflation rates proposed by the commission would be harmful to postal customers and the Postal Service,” said Art Sackler, manager of the Coalition for a 21st Century Postal Service, a broad trade group that includes mailers such as Amazon and the National Retail Federation. He said higher stamp rates could drive more price-sensitive consumers to online communications, decreasing postal revenue further.

The Postal Service, which had sought almost complete freedom to raise postal rates, said it was still reviewing the proposal to see if it was sufficient. “We continue to believe that any price cap is unnecessary in the rapidly evolving postal marketplace, for which all of our customers have alternatives to using the mail,” said Postmaster General Megan Brennan.

The Postal Service, now in the midst of the busy holiday shipping season, has projected it will reach new highs this year in holiday package delivery but warned that it may not be sustainable as finances continue to deteriorate.

Shipping rival UPS, which has opposed higher stamp rates as potentially anticompetitive, said Friday it hoped the regulatory commission would take additional steps to protect companies that the Postal Service competes with. UPS argues the post office could unfairly use revenue from higher stamp rates to lower package delivery rates, “which would be against U.S. law.”



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